Tencent will acquire China's second-largest search engine company Sogou (SOGO.US) in a wholly-owned deal, 36Kr reported, citing a person with knowledge of the matter.
Another person with knowledge of the deal confirmed this, adding that Tencent will wholly own Sogou for $9 per share.
Sogou shares rose more than 46 percent in early trading.
Tencent was Sogou's single largest shareholder before the deal, holding 38.71 percent of the company, more than Sohu's 33.44 percent.
Sogou was spun off from Sohu in 2004, with its main businesses being search engine, browser, and input method.
In August 2010, Sogou received a $15 million investment from Alibaba, which received a 10% stake in Sogou, to counter a planned takeover by Qihoo 360.
On July 2, 2012, Sohu announced that it had bought back Alibaba's approximately 10% stake in Sogou.
In September 2013, Tencent invested $448 million in Sogou and merged its search business and other related assets into Sogou.
Tencent acquired a 36.5% diluted stake in Sogou immediately following the transaction.
After Tencent's investment, strategic cooperation between the two companies at the business level also began.
In June 2014, Sogou search announced formal access to WeChat public account data, users can browse WeChat public account articles related to the query term in the Sogou search results page, which is an important source of traffic for Sogou search.
On November 9, 2017, Sogou went public on the New York Stock Exchange with an offering price of $13. It closed at $13.50 on its first trading day, up 3.85%, with a market capitalization of $5.29 billion. Sogou's second-largest shareholder, Sohu, had a market capitalization of just $2.15 billion that day.
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